EU sugar reform would taste sweet to Africa’s poor

Mozambique is desperately poor: third from the bottom on last year’s UN human development index. Three out of four people live on less than $2 a day. It has an HIV/AIDS infection rate of 15% and suffers severely from malaria, cholera and tuberculosis. There is virtually no infrastructure – only one decent road running up the edge of the country – but the land is fertile and could develop quickly with more agricultural production and trade. Sugar offers Mozambique one path out of poverty.

Each year, four mills across the country process hundreds of thousands of tonnes of cane. The industry employs at least 22,000 people and supports many thousands more. Under the European Union’s Everything but Arms (EBA) initiative, launched in 2001 to help the world’s poorest countries develop their trade capacity, Mozambique exports around 10 million tonnes of sugar a year to the EU. They get very good prices for this sugar and pay no import tariffs. This trade represents 16% of the country’s exports and 34% of its export revenue, and has potential to grow. Mozambique could double its sugar production by 2007. If it could increase its access to the EU, at current prices, the future could be very sweet indeed.

But Mozambique’s access is under threat. World Trade Organization (WTO) negotiations require the EU to bring its sugar regime into line with world commodity trade rules. A complex system of price support, tariffs and quotas, dating back to when Europe needed to be self-sufficient in agriculture, must be reformed to stop overproduction and dumping. Managed well, these changes could benefit many poor countries. Managed badly, they will protect the biggest and richest EU producers and hurt small farmers both in Europe and the developing world.

Current proposals include a 33% price cut for sugar in Europe by 2008. This sudden and dramatic change would hurt both fledgling industries like Mozambique’s and small farmers in Europe. The proposals would not even get rid of Europe’s surplus that is being challenged at the WTO. The least developed countries (LDCs) will get unlimited access to the EU market for their sugar from 2009, but the value of this access would be seriously compromised by the proposed price cut. In this light, the EBA, hailed as an invaluable gift from Europe to the world’s poorest countries, is more like fool’s gold.

Mozambique, along with other LDCs like Malawi, Zambia and Ethiopia, wants a more gradual price cut. They also want greater access to Europe’s markets which would encourage investment in its industry. After eight or ten years, they say, their industries will be efficient enough to survive in a less protected market and to compete more effectively against bigger producers like Brazil, Thailand and South Africa. Pro-development reform of EU sugar could create 20,000 jobs in Mozambique alone.

We must challenge policymakers in Europe and beyond to consider the impact their trade policies have on people in the developing world. It will not be easy to design a system that pleases everyone but that is no excuse for not trying. This is more than a technical matter of tariffs and subsidies: it directly affects poor people’s access to fundamental human rights – to an adequate standard of living, health, food, shelter and education.

The opportunity is ripe. Last week the WTO made its final ruling on the case brought by Brazil and others against the EU’s sugar regime. It upheld its original ruling against the EU. Following this, the EU will publish its reform proposals, to be finally agreed and implemented by July 2006.

Globally, this is a year of unprecedented opportunity to make poverty history. The G8 will focus on Africa, the UN will meet to review progress on the Millennium Development Goals, and the WTO will hold its ministerial meeting in Hong Kong.

The changes needed to lift millions of people out of poverty have nothing to do with charity; they’re about fairness, and about granting people the right to a livelihood and a future.

Mary Robinson, former UN High Commissioner for Human Rights, is executive director of Realizing Rights: The Ethical Globalization Initiative and is honorary president of Oxfam International.